What DStv wolf? Where is the big bad wolf?
| May 20th 2013
By Dominic ODIPO
How much do you currently pay every month to access your Pay TV channel? What local or foreign content do you get from it? Can you access such exclusive content as the English Premier League (EPL) on just any of the local Pay TV channels? And if you cannot do so, why not?
These are just a few of the basic questions that are now being asked in the emerging local Pay TV sector which will have to be addressed sooner or later if this nascent sector is to take off on a solid regulatory, commercial and financial basis.
As a number of manifestly unsubstantiated accusations are bandied about within the sector, particularly between Multichoice/DStv and Wananchi/Zuku, this might be as good a time as any to begin addressing some of these questions.
According to a recently published Deloitte and Touche competition study of the broadcast industry in Kenya, DStv Premium, a Multichoice package, is currently the most costly Pay TV product on the local market. At the time the study was carried out last year, the monthly subscription rate for DStv Premium was slightly above Sh6,000 while the corresponding figure for Wananchi’s most expensive package, Zuku Jumbo, was only about Sh3,500. GoTV was the cheapest at only Sh500 per month followed by DStv Access and Smart TV at 800 and 900, respectively.
The Deloitte competition study raised at least two very important issues regarding the local Pay TV sector, which all the major players in the sector, including the regulator, Communications Commission of Kenya (CCK), need to take particular note of. The first was with regard to the current scope of competition in the sector while the second was addressing the matter of how to deal with exclusive, particularly, sports content, in the sector.
With regard to the current scope of competition in the sector, the study noted “there appears to be significant scope for the size of the Pay TV market to grow and, accordingly, for new entrants to expand their market share without necessarily competing for existing subscribers.”
And with regard to exclusive sports content, such as the EPL, the study stated as follows: “If some subscribers choose a Pay TV provider on the basis of the availability of particular sports content, those customers would be harder for competitors to tap into as key sports content is sold on exclusive basis.”
In short, then, the local Pay TV market is growing and there is still room for new entrants, especially in the lower and middle sections of the market, while every player in the sector has to recognise that exclusive content will, as in the rest of the world, only be available to those operators who can be able to pay for it at open market rates.
This means, among other things, that Zuku or any other local Pay TV channel cannot fairly accuse the industry regulator, CCK, of denying it access to such exclusive sports content as Multichoice/DStv’s EPL.
In a series of recent statements, Zuku through Richard Bell, its chief executive officer, has effectively been accusing the CCK of being dormant, failing to level the playing field in the sector and thus ultimately aiding Multichoice/DStv, the biggest and oldest player in the sector.
But a closer examination of the existing market and regulatory conditions within the sector would tend to indicate that Zuku is being rather economical with the truth and that CCK, the industry regulator, is not in fact guilty as charged.
On the issue of content exclusivity for example, Zuku has been claiming it has been unfairly excluded from certain content such as the EPL which makes Multichoice/DStv so popular. But, in fact, that is not the way it really is on the ground.
EPL TV rights were procured by Multichoice through an open biding process, which inevitably pushed up the final price. Yet this exclusive content paradigm is the cornerstone of the Pay TV sector as shown by how such famous pay channels like HBO and Show-time have made their names by providing exclusive access to big ticket boxing and other top bill sports events.
It makes little sense, therefore, for Zuku to publicly accuse CCK of pushing the Multichoice agenda in this regard when it knows or ought to know exactly how these exclusivity rights are acquired.
Secondly, for some reason, Zuku does not appear to be investing as much in developing local content as Multichoice is doing. Through its Supersport channel, Multichoice is already broadcasting more than 100 Kenyan Premier League matches every year.
Slowly, this league, like the EPL is becoming an exclusive Multichoice package. Will Zuku turn around five years on and demand that CCK allows it access to the Kenyan Premier League in the name of fair competition?
Third, Zuku is demanding access to content that it is not willing to pay for on the open market ostensibly because of its relatively high subscriber base. But what exactly is its current subscriber base? Does it actually exceed 100,000?
No one outside the top leadership of the company can give you the exact figures since Wananchi is not a quoted company on any securities exchange and is, therefore, not required to produce these figures by law.
In a nutshell, therefore, it appears Zuku is crying wolf, yet there are no wolves here. Multichoice’s exclusive rights over the EPL, for example, were not unfairly acquired and CCK is not bending backwards to tilt the local Pay TV market against Zuku.
The realities of the market just happen to be tilting in favour of Multichoice/DStv after years of painstaking and focused investment in this sector. Unfortunately for Zuku, that is just the way it happens to be.
The writer is a lecturer and consultant in Nairobi.
Chelsea beats Everton 2-1Fernando Torres' first league goal since December confirmed third place and automatic Champions League qualification for Chelsea.
Restoring Nairobi’s iconic librariesBook Bunk is turning public libraries into what they call ‘Palaces for The People' while introducing technology in every aspect.
Boda boda operator shot dead after refusing to bribe police
- EACC raises alarm over fee hike crisis in schools
- Joho says petition seeking his removal is unconstitutional
- LSK President to challenge roll out of teacher refresher courses by TSC
- KQ admits aircraft’s loss of communication over Germany
- Be cautious while reporting rape cases, DCI